Freehold covenants

Question 1

What is a covenant?

Answer 1

A promise to do or not to do something.

Question 2

Is a covenant capable of being legal?

Answer 2

No, they are not listed under the LPA and are equitable in nature.

Question 3

What is the relevant formality for the creation of a covenant?

Answer 3

It needs to be in writing and signed.

Question 4

Who is the covenantor?

Answer 4

The person who makes the promise and has the burden of the covenant.

Question 5

Who is the covenantee?

Answer 5

The recipient of the promise and who has the benefit of the covenant.

Question 6

What is the servient/burdened land?

Answer 6

The land which is bound by the covenant owned by the covenantor.

Question 7

What is the dominant/benefited land?

Answer 7

The land of the covenant which is owned by the covenantee.

Question 8

What is a positive covenant?

Answer 8

A promise to do something which requires effort or expenditure to perform the obligation.

Question 9

What is a restrictive covenant?

Answer 9

A positive to NOT do something and requires no effort to perform the obligation.

Question 10

How do you determine if a covenant is positive or negative?

Answer 10

Look at the substance of the covenant as opposed to the wording itself.

Question 11

Can the burden of a covenant pass under common law?

Answer 11

The burden of either a positive or restrictive covenant cannot pass under common law.

Question 12

Can the burden of a covenant pass under equity?

Answer 12

Only the burden of a restrictive covenant can pass under equity provided certain requirements are satisfied.

Question 13

What are the requirements for the burden of a restrictive covenant to pass? (5)

Answer 13

1. The covenant must be restrictive in substance
2. The covenant must touch and concern the land
3. The covenant must have been imposed to benefit land of the original covenantee
4. The burden of the restrictive covenant must be intended to run with the land
5. The owner of the servient land must have notice of the covenant for it to bind them

Question 14

How can a covenant ‘touch and concern’ the land? (3)

Answer 14

There must be identifiable land that can enjoy the benefit, both at the time and at the date of enforcement

The owner of the land gets more from the land by reason of the covenant being attached to it

There must be sufficient proximity between the dominant and servient lands

Question 15

What are the three ways in which restrictive and positive covenants can be binding on a successor in title?

Answer 15

By creating a lease

Indemnity covenants

The doctrine of mutual benefit and burden

Question 16

How can an indemnity covenant bind successors in title?

Answer 16

A new buyer will promise to observe the positive covenants and indemnify the seller for any loss incurred as a consequence of breach.

An indemnity covenant is obtained from each new buyer and creates a chain of indemnities which enables the original covenantor to sue the successor.

Question 17

What is the doctrine of mutual benefit and burden in Halsall v Brizell in respect of positive covenants?

Answer 17

If a person wishes to take advantage of a service or facility which benefits their land, they must also comply with any corresponding obligation (i.e. paying towards maintenance of a path which grants them a right of way).

Question 18

What are the two requirements of the doctrine of mutual benefit in respect of positive covenants?

Answer 18

There must be a clear correlation between the benefit and the linked burden.

The covenantor’s successors in title must have had the opportunity to either take the benefit or renounce it.

Question 19

How can the benefit of a covenant pass at common law?

Answer 19

Annexation
Assignment

Question 20

What are the requirements to pass the benefit of a covenant at common law under annexation?

Answer 20

The covenant must touch and concern the land

There must have been an intention that the benefit should run with the estate owned by the covenantee (express or implied)

The covenantee must have a legal estate in the benefitted land

The buyer of the benefitted land must also take a legal title in the benefitted land

Question 21

What are the requirements to pass the benefit of a covenant at common law under assignment?

Answer 21

It must be expressly at the time of transfer

It must be in writing and signed by the assignor

Written notice of the assignment must be given to the person with the burden

Question 22

How can the benefit of a covenant pass under equity? (3)

Answer 22

Annexation
Assignment
Building schemes

Question 23

What are the three types of annexation which allows a covenant benefit to pass under equity?

Answer 23

Express annexation
Implied annexation
Statutory annexation

Question 24

What is statutory annexation of a covenant?

Answer 24

The LPA automatically annexes a freehold covenant to each and every part of the land provided:

1. The covenant must have been created after the implementation of the LPA (i.e. post-1925)
2. The covenant must touch and concern the land.

Question 25

What is implied annexation of a covenant?

Answer 25

The required intention must be manifested in the transfer as construed in the light of all the surrounding circumstances.

Question 26

How can the benefit of a covenant pass under a building scheme?

Answer 26

It imposes recipricol obligations between buyers of the different plots of the scheme.

Question 27

What are the characteristics of a building scheme?

Answer 27

It applies to a defined area where title is derived from a common owner

The estate was laid out in lots subject to restrictions intended to be imposed on the lots

The common owner intended the restrictions to apply to all of the lots to be sold

The original buyers bought their lots on the basis that the restrictions would benefit all of the lots of the scheme

Question 28

What is the principle of matching the benefit and burden?

Answer 28

If a burden has passed in equity it must be matched by the benefit of passing in equity (restrictive covenants only).

Question 29

What is required to match the benefit and the burden in respect of restrictive covenants?

Answer 29

The criteria in Tulk v Moxhay must apply

The successor in title of the original covenantor must demonstrate they have the benefit of the covenant in equity, which enables them to pursue a claim against a successor.

Question 30

Can a positive covenant be subject to the principle of matching the benefit to the burden?

Answer 30

No - the original covenantor remains bound by privity of contract in relation to positive covenants.

Question 31

What are the remedies for a breach of positive covenant?

Answer 31

Damages
Specific performance

Question 32

What are the remedies for a breach of restrictive covenant?

Answer 32

The principal remedy is an injunction.

The court may also award damages provided:
- the amount is small
- they are capable of being estimated in money
- it would be oppressive to grant an injunction

Question 33

How can covenants be released or modified?

Answer 33

By express release from the covenantee

Where the servient and dominant land has come into common ownership

Where section 84 of the LPA applies

Where insurance is taken out and the insurer accepts the financial risks of such breach

Question 34

How can section 84 of the LPA discharge or modify a restrictive covenant?

Answer 34

If the restrictive covenant is obsolete

If the restrictive covenant impedes some practical use of the land

Where those entitled have agreed expressly or impliedly to the discharge

The discharge will not injure the persons entitled to the benefit